From tomorrow the firm’s forecourts will knock 2p per litre off both its unleaded and its diesel.

If past trends continue, rival supermarkets Tesco, Morrisons and Sainsbury’s are expected to follow suit and reduce their own fuel prices.

Asda said the new prices would mean motorists paying no more than 126.7p a litre for petrol and 133.7p a litre for diesel.

Asda's petrol trading director, Andy Peake, said: "With the latest price cut we're now seeing the lowest price on diesel since July 2012.

"We've quickly passed on the latest reductions in costs which is great news for motorists, particularly with household budgets so stretched after Christmas."